ZA200604224B

ZA200604224B - Secure payment system

Info

Publication number: ZA200604224B
Application number: ZA200604224A
Authority: ZA
Inventors: Elbaum Hector Daniel; Jamieson Andrew; Mcgregor David
Original assignee: Point Of Pay Pty Ltd
Priority date: 2003-11-26
Filing date: 2006-05-24
Publication date: 2007-11-28
Also published as: PT1687725T; US8074874B2; AU2004292677A1; JP2007512595A; HUE052327T2; CY1123751T1; SI1687725T1; KR101361383B1; WO2005052801A1; ES2823592T3; CN104732379A; CN1906629A; PL1687725T3; NZ548145A; DK1687725T3; JP2012089143A; KR20060112671A; EP1687725A1; KR101423014B1; US20070170245A1

Description

SECURE PAYMENT SYSTEM

FIELD OF THE INVENTION

The invention relates to the authentication of users for the purpose of conducting, e.g. financial transactions, and mmore specifically to a system, method and apparatus by which transactions betvween two physically separate parties connected over a public data network such as the Internet can be secured.

BACKGROUND OF THE INVENTION

The systems to secure payments over the Internet have been improved since their inception in the mid 1990's to &he point where directly related credit card fraud has achieved parity with that of other Cardholder Not Present (CNP) transactions. However, lack of understanding of these methods combined with a disparate media focus on the few cases of fraud that do occur have resulted in a consistently low level of consumer confidence.

Attempts fo increase the customer's perception of security, by guaranteeing re-imbursement for contessted CNP transactions, has merely exacerbated the problem from the other direction. Many of the smaller online merchants have withdrawn acceptance of credit card transactions because they are unable to support the repeated non-payment of goods that is associated with customers who contest transactions, either genuinely or fraudulently.

The problems that exist are systemaatic of the methods and conventions by which payments over the Intemet are processed. The customer is required to provide to the merchant all of the relevant «details of their payment card — such as

Primary Account Number (PAN), expiry date, etc — which enables the merchant to then charge the fee to this card. The mechanics of this payment involve the merchant sending a payment request that includes the customer's payment details to the financial institution that holdls their bank account, or to a financial service provider who facilitates the conrection between merchants and their financial institutions. The merchant's fimancial institution, referred to as the

Acquiring bank, then sends an authorization message to the financial institution that issued the payment card, the details of which were provided by the customer.

This message is sent through an inter-bank network, usually maintained by a third party such as a large payment card autho rity such as MasterCard, VISA or other provider. The financial institution that issued the payment card is identified by the first 6 digits of the payment card number, known as the Bank Issuer Number (BIN).

However, there is no way to ensures that the details provided to the merchant by the customer genuinely belong to that customer, and have not been fraudulently obtained. It is this inability to confirm the presence of the actual owner of the card that leads to such a high percentage of ‘charge backs’, or transactions where the customer denies taking part in the transaction.

Traditionally, if the customer challenges a trarasaction and the merchant is unable to present proof of their authorization — such as a signature — the money is refunded to the customer, and the merchant nmust cover the loss.

Customers are also disenfranchised from utilizing Internet payment options because of fear of the theft of their card details. This theft can occur during the transaction itself, or may occur after the fact due to an insecurity of the merchants web store. Many merchants ma intain a database of customer card details, ostensibly to streamline repeat purchases for the consumer, and these databases become attractive targets to the criminal fraternity. Indeed, it is this persistence of the customers sensitive information that frightens many consumers the most. Although transactions that result from such a ‘stolen card’ may be ‘charged back’ to the merchant, the inconvenience of doing so, coupled with the burden of obtaining a new card, is enough to discourage many consumers.

Systems and methods such as those disclosed in US6,098,053,

US2002/0123972A1, US2003/0140004A.1, US2002/0077978A1, and

US2003/0154139A1 have attempted to provide a solution to this problem by integrating traditional EFTPOS functionality into the Internet payment arena. In these documents methods are taught that iravolve the use of an EFTPOS device that is held and maintained by the customer for the purposes of making a secure payment to the merchant without fear of fraud. As the customer's payment details are not passed to the merchant, ©r passed to the merchant only in encrypted form, there is no risk that they will be compromised, at any stage.

However, these systems require fundamental changes to the interaction between customer, merchant, and the banking institwtions. The merchant is required to change their ‘web store’ purchase systems, and the relationship between the merchant and its Acquirer is removed from the transaction. However, without the support of the merchants, there is no incentive for the customer to participate in the system, indeed with no merchant support there is no system for the customer to take part in. Conversely, there is no incentive for the merchant to alter their payment systems without a large customer base able to utilize these changes.

Therefore any such revolutionary system faces a fundamental challenge to gain momentum in a market dominated by an altern ative paradigm, and this problem has prevented the uptake of these systems.

Alternatively, other systems provide the customer with a single use PAN, which can only be used for one transaction. “This removes the risk associated with the theft of the customer's details, as they -are not useful outside the context of a single transaction that the customer has already performed This system has merits, but can be seen to protect only the customer in the transaction, while proving no benefit to the merchant. As indicate=d above, the high level of ‘charge backs’ generated through intemet commerce is a key problem in increasing revenues in this field, and any system that does not provide benefit for the merchant faces a high barrier to entry In the market. These systems also suffer from the requirement that the card Issuer must alter their host systems to correctly identify and interpret the substituted PAN as belonging to the customer who initiated the transaction. Alterations to these banking systems are costly and time-consuming due the high quality assurarace and certification requirements that must be met. Additionally, these systems are incompatible with some merchant purchase software (such as the ‘one click systems) where the 26 customer is expected to use a single card number for many transactions. Finally, the customer is limited to using only cards that provide this replacement PAN facility for any transaction that they perform on the intemet. This limits the purchase and payment choices of the consumer, therefore reducing the appeal of

Internet commerce to them.

A similar system is disclosed jim US patent application no. 2003/0195842A1, however the system described therein is further limited in its application by necessitating the use of stowed value payment cards by the customer.

Another method for securing of Internet transactions is taught by US patent application no. US2003/0097343A1. This system requires an intermediary party, referred to as a processing centre, to act as a conduit through which the transaction is conducted. Customer security iS provided by reducing the exposure of customers’ payment details to a single trusted party, rather than a plurality of merchants. However, this system similarly suffers from the requirement for a system wide paradigm shift in the method by which Internet payments are made.

US patent no. 5,809,143 teaches the use of a secure keyboard for Internet commerce transactions. This system provides secure entry of card holder information, such as account number and PIN. However, the mechanisms for interaction with the merchant are altered once again. Additionally, the requirement for a secondary communications meams limits the application of this system in the present environment.

Accordingly, there is a need for a system -that can provide benefit to all involved parties — customer, merchant, and financial institutions — and that can be deployed and applied immediately with no impact any party other than the customer who uses the system.

It is therefore an object of the present inve ntion to provide a method and system for authenticating identifying information, such as account number and

PIN, provided by a user of a public data network, such as the Internet, that mitigates the aforementioned problems of the prior art.

Any discussion of documents, devices, acts or knowledge in this specification is included to explain the context of the invention. It should not be taken as an admission that any of the material forrmed part of the prior art base or the common general knowledge in the relevant art on or before the priority date of the claims herein.

SUMMARY OF THE INVENTION

In one aspect the present invention provides a system for the authentication by a card-issuing financial institution of identifying information of a card-hoiding user of a public data network, including: a secure data entry device connected to the public data network; and

VVO0 2005/052801 PCT/AU2004/001663 a gateway device connected to the public data network and to a private data network used for transmitting messages between financial institutions; wherein the secure data entry device includes means for the user tc enter identifying information of a card issued by the card issuing financial institution, 5 and means for transmitting the identifying information in a Secure manner over the public data network to the gateway device; and wherein the gateway device includes means for transmitting the identifying info rmation to the card-issuing financial institution and for rexceiving an approval response from the card-issuing financial institution over the private data network; whereby the approval response provides authentication of the identifying infosrmation by the card-issuing financial institution.

Accordingly, the system enables the identifying information of a card holder located at a point of purchase remote from any point of sale to be verified by the card-issuing financial institution in a secure manner over a public data network.

Preferably, the public data network is the Internet. The secure data entry dewice may be connected to the public data network via the users personal computer.

The private data network may be an inter-bank n-etwork used for the tra nsferral of electronic transaction data. The private data network may be provided via a dedicated network operated for the sole purpose of conducting such electronic transactions. Alternatively, the private data network may be a virtual private network provided via a host public data netwrork. The host public da ta network may be the Internet.

The secure data entry device preferably includes a card reader for reading reBevant information stored on the user's card. The card reader may be able to read 1SO 7816 ‘smart card’ or ISO 7811 ‘mag stripe’ type cards, and is preferably able to read both types of cards.

Preferably, the secure data entry device also includess a keypad to enable thee user to enter data into the system. Data entered by the user may include a

Personal Identification number associated with the card.

The identifying information preferably includes one or more of: the Primary

Account Number associated with the card; the expiry date of the card; and the user's Personal Identification Number associated with the card. Advantageously, by enabling the user to provide this information for authentication in a secure manner at a point of purchase that rmay be remote from any point of sale, the system is able to confirm the presence of the of the actual owner of the card at the point of purchase.

The identifying information may be transmitted using a standard transaction message format compliant to 1ISO 8583. Preferably the ISO 8583 message used is one of: an ‘0200’ financial presentment message, and an ‘0104’ authorisation message.

The gateway device preferably also includes means for transmitting the approval response to the secure data entry device. In a preferred embodiment, the secure data entry device furtker includes means for deriving from the approval response verifiable proof that the customer's identifying information has been authenticated by the card-issuing financial institution. The proof may be an authentication data block, consisting of data computed in a secure manner from the approval sent from the card-issuing bank. The data block may be a whole or truncated encryption of the approval message derived using an encryption key stored securely within the secure data entry device.

Advantageously, the system thus enables the secure data entry device to derive verifiable proof of the presen ce of the actual owner of the card at the point of purchase that may be used in subsequent transactions with other devices having the ability to verify the proof.

In a particularly preferred ernbodiment, the gateway device also includes means to generate a replacement card number upon receipt of the approval response from the card-issuing institution. The replacement card number may be transmitted to the secure data entry device over the public data network. The replacement card number may then be used in a subsequent payment transaction conducted over the public data network. Advantageously, in accordance with the invention actual card details are never transmitted over the network in an insecure manner, or provided to a merchant or other online operator, thus providing for greater security of card details and enhanced consumer confidence in the systern.

The replacement card number may be generated dynamically for use ina single transaction. Alternatively, the replacement card number may be maintained and used for multiple transactions.

Supplementary details of a transaction, including one or more of the transaction amount and a merchant identification, may also be transmitted to the gateway device by the secure data entry device. Preferably, said supplementary details are transmitted to the gateway deviice in the transaction message carrying the identifying information.

In a particularly preferred embodiment the Bank Identification Number of the replacement card number may be selected such that the payment transaction is routed through the gateway device on the private data network before being sent to the card-issuing financial institution. Alternatively, the Bank Identification

Number of the replacement card number smay be selected such that the payment transaction is directed over the private dlata network to the gateway device by identifying the gateway device as a card-issuing institution of the replacement card number.

Preferably, the gateway device further includes means for receiving payment transaction messages from the private data network, means for modifying received payment transaction messages, and means for transmitting said modified payment transaction messages to the card-issuing financial institution, whereby the gateway device is able to substitute actual card numbers for replacement card numbers before transmitting received payment transaction messages to the card-issuing financial institution. in a particularly preferred embodiment, the gateway device further includes a database of replacement card numbers including corresponding actual card numbers and supplementary transaction details. in another aspect, the invention orovides a method for the authentication by a card-issuing financial institution of identifying information of a card-holding user of a public data network, including the steps of: providing a secure data entry device connected to the public data network; providing a gateway device connected to the public data network and to a private data network used for tramsmitting messages between financial institutions;

the user entering identifying information of a card issued by the card issuing financial institution into the secure data entry device; transmitting the identifying information in a secure manner over the public data network to the gateway device, transmitting the identifying information to the card-issuing financial institution; and receiving an approval response from the card-issuing financial institution over the private data network; whereby the approval response provides authentication of the identifying information by the card-issuing financial institution.

In yet another aspect, the invention provides a secure data entry apparatus for use in a system for the authentication by a card-issuing financial institution of identifying information of a card-holding user of a public data network including: an interface for connection to a public data network; means for the user to enter identifying information of a card issued by the financial institution; means for transmitting the identifying information in a secure manner over the public data network to a gateway device that includes means for transmitting the identifying information to the card-issuing financial institution and for receiving an approval response from the card-issuing financial institution over the private data network; whereby the approval response provides authentication of the identifying information by the card-issuing financial institution.

The invention further provides a process for the authentication, by a card- issuing financial institution, of identifying information of a card-holding user of a public data network, the process including thee following steps: providing a secure data entry device connected to the public data network; and providing a gateway device connected to the public data network and to a private data network used for transmitting messages between financial institutions;

transmitting the identifying information in a secure mann er over the public data network to the gateway device; transmitting the identifying information to the card -issuing financial institution; and receiving an approval response from the card-issuing Financial institution over t he private data network; whereby the approval response provides authenticatiorm of the identifying information by the card-issuing financial institution.

BRIE F DESCRIPTION OF THE DRAWINGS

Further benefits and advantages of the present inve ntion will become apparent in the following description of preferred embodiments of the invention, which should not, however, be considered to limit the scope of the invention or any of the preceding statements. Preferred embodiments are described with reference to the accompanying drawings in which:

Figure 1 illustrates an embodiment of a secure custome=r data entry device in accordance with the present invention;

Figure 2 shows the secure data entry device of Figure= 1 in the form of a funckional block diagram;

Figure 3 is a block diagram of an embodiment of a gateway device in accordance with the present invention;

Figure 4 illustrates a system for conducting a secure transaction between a customer and a merchant in accordance with a preferred embeodiment the present invention; and

Figure 5 is a flow diagram illustrating the steps that may be carried out in the course of a transaction within the system of Figure 4.

DESCRIPTION OF PREFERRED EMBODIMENT

Figure 1 provides an illustration of an embodiment of a secure data entry deviice, also referred to herein as a Point of Payment, or Po¥P, device. Figure 2 represents this device as a logical block diagram of its composite parts.

The PoP device 1 is a low cost secure productt that includes a processing unit 3, a card reader 5, a keypad 6, a display 4, and an interface 7 providing for t he transmission of data and power between the device and a Personal Computer 8. The interface 7 may be, for example, a standard peripheral interface such as a

LJSB connection.

The PoP device 1 is capable of securely obtaining payment information from a customer, such as payment card details and Personal Identification

Number (PIN), and encrypting these details for their secure transport to a remote device. In the preferred embodiment, the encryption and message formats used by the PoP device comply to ISO 8583.

The processing unit 3 is an assembly of electronics that provides the control and electronic storage requirements of the device, such as controlling the keypad, display, and card reader, and providing for the secure storage of encryption keys. In the preferred embodiment, the gprocessing unit 3 is a single integrated circuit, but it may consist of an assermbly of physically separate integrated circuits or other electronic parts such as transistors and logic gates.

The card reader 5 is used to obtain the relev-ant identification information rom a customer's payment card, and may be constructed to support cards with «embedded electronics such as those that conform to the ISO 7816 ‘smart card’ standard or cards that possess only a magnetic stripe on one or both of their faces to hold information such as 1SO 7811 compliaant ‘mag stripe’ cards. In the preferred embodiment, the card reader 5 supports both said ‘smart card’ and said ‘mag stripe’ card types.

The keypad 6 is used for user interaction with the system. It consists of a number of keys that allow the user to perform actions including the entry of numeric digits, and the acceptance or cancellation of entries. The keypad 6 may also support character based input, and is construct-ed and scanned in a manner that ensures the security and integrity of the user in put. The keypad 6 may also support the use of additional function’ keys whose function is dictated by the status and operation of the software application beinsg executed by the processing device 3.

The display 4 provides information to the user or the status of the device and its function. In the preferred embodiment, the display consists of a Liquid

Crystal Display, which is capable of displaying at least 2 rows of 8 characters.

All of the components of the PoP device 1 are erclosed within a casing 2, preferably made from an inexpensive plastic alloy. Security measures such as tamper evidence, tamper detection, and tamper response are integrated into the device and casing to prevent unauthorised access to the components, such as the keypad or processing device. Such security meassures are requirements of the financial institutions to which the PoP device must connect and are essential 40 for the device to accept the PINs that are associated writh customer cards. Said

PINs are used in the authentication of the card holder during the transaction.

Figure 3 shows a logical block diagram of a gateway device 12, also referred to herein as a PoP gateway, which is connected to both the Intemet 10 and a private data network 15 used for transmitting messages, such as transaction messages, between financial institutions. The network 15 is also referred to herein as an Inter-Bank Network. The gateway includes processing means 20, such as a microprocessor and associated memory and other peripheral hardware, which executes a PoP application 17 that controls the operation of the PoP gateway 12 and interfaces to a firancial host switch 18 and a card number database 19.

The processing means 20 could be any system that allows for the execution of programmed commands, such as a personal, industrial, or mainframe computer. Alternatively, the processing means 20 could be a single

Integrated Circuit, or combination of many physically separate Integrated Circuits or logic gates. :

The financial host switch 18 is an application that is designed to provide for the transmission and receipt of messages with a financial institution, including but not limited to those messages defined by the international financial interchange standard 1SO 8583.

The card number database 19 is a database of ‘virtual’ card numbers that have been assigned to card holders for use with one or more transactions.

Figure 4 is a block diagram of a complete transaction system, according to a presently preferred embodiment of the invention, that illustrates the different parties -that are potentially involved in a transaction, and the corinections between them. Bn summary, the system includes a customer 9 having a secure data entry device (PoP device) connected to the Internet 10. As described above, this connection may be provided via the customer's Personal Connputer (PC). The system also includes a merchant 11, having a virtual store that can be accessed via the Internet 11, and an acquiring financial institution 16 which holds the banking account of the merchant (Merchant Acquirer). Time system further includess a card-issuing financial institution 13 (Card Issuer) that holds a banking account of the customer; and a gateway device 12 (PoP Gateway).

I n the presently preferred embodiment, the customer 9 “is the initiator and payer of a transaction and possesses a PoP device 1 which is connected to a personal computer 8 which is connected to the Internet 10. E he customer also posses=ses a payment card and associated PIN. “The merchant 11 is the recipient and payee of a transaction. The merchaant possesses an Internet site that utilises a standard payment system for the pro cessing of Internet transactions and this system is conmected through the

Internet 10 to the merchant's bank 16 either directly or through a payment service provide=r that facilitates Internet commerce by connecting merchants and financial instituti-ons. ~The merchants bank 16, also known as the Acquiwing Bank, is the instituti on that holds that merchant's bank account and is connected to the merchant via the Internet 10, either directly or indirectly, and an inter-bank network 15 used for the transferral of electronic transaction dilata. Examples of such n etworks are Bank Net which is maintained by MasterCard, and VISA Net which iis maintained by VISA. These networks are the standard method for the transfe rral of transactions between physically separate financial institutions, and as use=d by the present Internet commerce systems to issue authorisation and funds t ransfer requests. ~The Card Issuing bank 13 is the financial institutiom that issued the payme ntcard to the customer and is also connected to the inter-bank network 15. “The PoP gateway 12 is connected to both the internet 10 and the inter- bank raetwork 15 and is involved in both the initial EFTPOS transaction that is used to confirm the identity and funds of the customer 9, and the standard authorisation/funds transfer messages that are sent from the merchant 11 via the merchant's Acquiring Bank 16. Multiple payment gateways may exist at any one time to prevent congestion or possible attacks, such as a ‘denial of service’ attack, frorn rendering the system inoperable. It is also possible that any arbitrary

PoP device may be required to connect to a specific PoP gateway clue to the geographical location or contractual arrangements of said PoP device.

Additionally, the PoP gateway need not be a physically separate entity, but may in fact be #integrated into the inter bank network or deployed and mairtained by the card Issuing bank 13 as a part of its financial host system.

Figure 5 provides a flow diagram 500 of the operation of the preferred embodimemt of the invention. The diagram 500 illustrates that the system may be used to Obtain authentication of customer related financial details for the purposes of: transferring proof of authentication to another party; obtaining a replacement card number that may be used in conjurction with the invention for subsequent remote purchases; or obtaining a replacement card number that may be used in conjuction with the invention for a purchase currently in progress. in order to perfom one of the three operations outlined zmbove, the appropriate operating mode is first selected 502. The operating modes is one of: authentication proof; dynamic card number replacement; or static cawd number replacement. The desired mode of operation may be selected throughs customer interaction, or automatically by the customers Personal Computer, or the processing means of the PoP device.

In the next step 504 in all modes of operation, the customer e=nters their card-identiifying information by entering their payment card and PIN ino the PoP device.

To obtain authentication of the customers identifying informat ion, in the next step 506 the PoP device communicates the information to the PoP gateway.

In particular, the PoP device 1 provides for the secure transmiss jon of the customers’ payment details to the PoP gateway 12 over the Inrternet 10.

Preferably , this security is provided via the encryption of the informatior, using an encryption scheme and encryption key maintained within the secure housing of said PoP device 1 such that the customer's payment details are not available to any party or device extemal to the PoP device in an unencrypted form. In the preferred embodiment, the encryption and message format used to communicate to said PoP gateway conform to ISO 8583, and specifically the payment details are formatted as a ‘0200’ purchase or ‘0104’ authorisation transaction. An indication in this message is supplied by the PoP device to inform the PoP gateway of the selected mode of operation for the present transaction.

In the subsequent step 508, the PoP gateway 12 decrypts and forwards this transaction to the card Issuing bank 13. This may involve the PoP gateway re-encrypting andlor re-formatting the message for transmission to the card

Issuing bank 13. If the card-issuing bank does not indicate approval of the payment details (e.g. due to incorrect PIN supplied by the customer), then an indication that the transaction has been declined is retuned to the PoP device, which informs 510 the customer of the failure.

However, if the payment details are approved by the card-issuing bank, then further steps are carried out by, the precise operations being selected 512 on the basis of the chosen mode of operation. in the Authentication Proof mode of operation, the PoP gateway transfers 514 the approval from the card-issuing bank to the PoP device. The PoP device then uses this approval to derive 516 werifiable proof that the customers identifying information has been authenticated. The proof will typically take the form of an authentication data block, consisting of data that may be derived in a secure manner from the approval sent from the card-issuing bank. An authentication data block may be, for example, generated in the form of a secure digest of the approval message, such as a whole or truncated encryption of the approval message. Such encryption may be performed using a secret key stored securely within the PoP device.

The approval message in combination with the authentication data block may subsequently be used as proof of authorisation by the card-issuing bank. A receiving device is able to verify the proof by confirming that an approval message and authentication block provided to it by the PoP device are valid. Ifa symmetric encryption system is used to generate the authentication data block, then the receiving device requires the sanne secret key for verification as was used by the PoP device in generating the data block. Such ssecret keys may be distribmted to those secure and trusted devices requiring the:m via any one of a number of secure key distribution methods known in the art. Alternatively, an asymmetric encryption system may be used, in which case thie PoP device uses a private key to generate the authentication data block and thes receiving device is able to verify the proof using the corresponding public key, wehich does not need to be stored or distributed in a secure manner.

In the Static Card Number Replacement mode of operation, the system is used to issue the customer with a static replacement card nurmber which enables the POP device to be used with merchants that utilise a payment system that stores customers payment details for use in subsequent trarmsactions. The ‘one click’ payment system is an example of such a system. Preferably, the PoP gateway stores this static replacement card number, thus allowing the same replacement card number to be provided for a particular payment card irrespective of the particular PoP device used. Alternatively, tthe PoP device may store the static replacement card number.

In the Static Card Number Replacement mode, once approval has been indicated in the reply from the card-Issuing bank, the PoP gateeway 12 establishes 534 weith the PoP device 1 a static replacement card number. Preferably, the first six digits of the replacement card number, known as the Bank Identification

Numbrer, are set to a specific value that indicates that the card number was issued by the PoP gateway 12. This allows a transaction farom any merchant's bank 16 to be routed through said PoP gateway 12 during itss transit through the inter-bank network 15 to the card Issuing bank 14. Preferably, the Bank

Identification Number used in the replacement card numbear indicates that the card is issued by the customers Issuing Bank 13, but that the transaction must be routed through the PoP gateway 12 before reaching the Issuing Bank 13. Such specific routing can be indicated in fields 33 and 100 of an ISSO 8583 transaction message, the values of these fields being set according to the card BIN. The remaining digits of the replacement card number could be the original Primary

Account Number encrypted by either the PoP device 1 or thes gateway 12, a card numb er randomly generated by the gateway, or a card numbeer chosen from a list conta ined within the card number database 19. If an encrwpted version of the original customer payment card number is used, some modification of this encrypted value may be necessary to ens ure the replacement card number complies to any required payment card standards.

The static replacement card number iss then transferred to the user via the

PoP device 1, and may be stored in the device 1, or in the card number database 19 of the PoP gateway 12.

To complete a subsequent purchasse, the customer 9 provides the merchant 11 with the static replacement card number in place of their actual card number, and the transaction is completed in accordance with the steps 520-532 as described in greater detail in the following discussion of the Dynamic Card

Replacement mode of operation.

In the Dynamic Card Replacement mode of operation, the system is used to issue the customer with a replacement payment card number that may be used in a transaction currently in progress across the Intemet. The customer 9 selects goods/services from merchant 11 web site and proceeds to the payment ‘page’ in the normal manner, where they are presented with the merchant's 11 payment information form.

In the Dynamic Card Number Replacement mode, once approval has been indicated in the reply from the card-Issuing bank, the PoP gateway 12 checks if the payment card has a static replacement card number assigned to it, and will use this if it exists. If not, the PoP gatewray 12 establishes 518 with the PoP device 1 a replacement card number which will apply for the remainder of the transaction with the merchant. The Bank Identification Number may need to be set to a specific value that indicates that the card number was issued by the PoP gateway 12 to allow the transaction from the merchant's bank 16 to be routed through the PoP gateway 12 during its trarmsit through the inter bank network 15 to the card Issuing bank 14. Preferably, thes Bank Identification Number used for the replacement card number indicates that the card is issued by the customer's

Issuing Bank 13, but that the transaction must be routed through the PoP gateway 12 before reaching the Issuing bank 13. Such specific routing can be indicated in fields 33 and 100 of an ISO 85-83 transaction message, the values of these fields being set according to the card BIN. The remaining digits of the replacement card number could be the original Primary Account Number encrypted by the PoP device 1 or the gateway 12, a card number randomly generated by the gateway 12, or a card number chosen from a list contained within the card number database 19. If an encrypted version of the original customer payment card number is used, some modification of this encrypted value may be necessary to ensure the replacement card number complies to any required payment card standards.

Preferably the PoP gateway 12 also olbotains information relating to the cost of the transaction and identification of the merchant, with respect to the purchase underway.

The PoP gateway 12 then stores the replacement card number, and the original card number, and any additional information obtained relating to the transaction in process, in the card number database 19 for use later in the transaction. Alternatively, these details could be transmitted to the PoP gateway 12 in special fields of the transaction message, removing the requirement for the card number database. Preferably, the PoP gateway 12 supports both of these methods.

The PoP device 1 then notifies the PoP application software resident on the customer's Personal Computer that a replacement card number has been obtained. This replacement card number is then transferred 520 to the merchant's Internet payment page, either through the agency of the PoP PC application automatically determining the lo cation of the card number Field, or by displaying the card number on the display 4- of the PoP device 1 for the customer g to transcribe into the appropriate section of the page.

The merchant 11 then proceeds with the transaction using their standard payment system, as used with any normal transaction. For example, the merchant may have their own payment processing system that is used , they may transfer the payment request to a payrment service provider, or they may communicate directly to the financial institution that maintains the merchant's banking account. Regardless of the embodiment of this payment system, a funds transfer request will ultimately be issued to the merchant's Bank 16.

The merchant's Bank 16 will then fowward 522 a funds transfer message to the financial institution that is indicated by the BIN of the replacement card number supplied by customer 9 via the inter bank network 15. In the preferred embodiment of the invention, this is the customers’ card-issuing bank 13, however this may also be the PoP gateway 12. Preferably this message will ta ke the form of an ISO 8583 authorisation request ‘0100' message, financial presentment request ‘0200’ message, or financial presentment advice ‘0220° message. The type, format, and number of messages that are sent to said customer card issuing bank depends on the transaction amount and the policies of the merchant's bank 16. Multiple messages may be sent, for example €he merchant's bank 16 may send an authorisation request message to verify he customer's ability’ to pay for the purchase before the transaction is finalised with the customer, and then send a financial presentment request when the transaction is finalised.

In the preferred embodiment of the invention the funds transfer messages are sent to the customer's card issuing bank 13 via the PoP gateway 12. T his routing is determined by the BIN of the replacement card number supplied by the customer 9. In the next step 524 of the transaction, at the PoP gateway the PoP application 17 identifies the replacement card number in its card nurmaber database 19 and then re-instates the customers’ original card number. Any supplementary details supplied during the initial authorisation transaction, such as the payment amount and merchant details, are also checked at this stage and. the transaction is rejected if these values to not match those held in the card nunmber database 19. If all supplied supplementary details are found to be correct, the message is prepared for transmission to the customers’ card issuing bank 13. If the PoP gateway 12 is logically remote to the customers’ card issuing bank, the

PoP application also alters the message to ensure that the response to the message is routed back through the PoP gateway 12 on its way to the merchant's bank 16. In an ISO 8583 message this can be achieved by altering the Acq uirer field in the message.

In the subsequent step 526, the customer's card issuing bank 13 receives the financial message from the PoP gateway 12, and processes it in the nomal manner. The response is sent back to the PoP gateway 12 as dictated by the alterations to tine original message performed by the PoP application prior to its transmission to said customer bank. In a step 528 performed at the PoP gateway 12, the customer's card number is once again substituted with the replacesment card number and the response is forward ed it to the Acquirer, i.e. the merchant's bank 16. This may require the PoP application to keep a record of forwarded financial messages to enable it to re-transmit the response back to the correct financial institution.

Upon receipt of all the transaction message responses sent from the customer card issuing bank 13 via the PoP gateway 12, the merchant bank 16 finalises 530 the transaction. The goods or services requested by the customer are fully paid for, and the transaction is completed 532.

From the foregoing description, it will be readily apparent to those skilled in the art that many variations of the secure payment system and method are possible in accordance with the invention, which is not to be limited to the embodiments described. A number of combinations of features have been described with reference to specific embodiments of the invention, or component parts thereof, however it will be apparent to the skilled person that these various 16 features may be combined in other ways while still falling within the scope of the invention as defined by the appended claims.

In particular, it will be apparent to a skilled person that many modifications may be made to the PoP device 1, including the integration of the device into a computer keyboard, mobile phone, pointing device, or other such computer peripheral, without departing from the spirit and scope of the invention.

Furthermore, the PoP gateway 12 need not be a stand-alone device, and may be integrated into a PoP Issuing financial institution (PoP Issuer) or the inter-bank network.

In other variations, additional support for the secure payment system may be provided by the merchant's web site. For example, rather than the customer 9 being required to enter their card and PIN into the PoP device 1 in order to activate the PoP software, special fields contained within the payment page, such as HTML tags that are not displayed to the customer 9 may cause software installed onto the Personal Computer 8 to activate the PoP device 1 which will then prompt the customer 1 to enter their payment card and details. Such special fields could also be used by the PoP software to convey the customers’ payment information and shipping details to the rmerchant.

It will therefore be understood €hat the invention could take many forms a nd be put to many different uses. All such forms and usess are embodied within the spirit and scope of the invention, which is to be urderstood as not being limited to the particular constructional details of the e mbodiments discussed above, but which extends to each novel feature and combination of features disclosed in or evident from this specification and the accompanying drawings. All oof these different combinations constitute various alte mative aspects of the invention. it will also be understood that the term “comprisses” (or its grammatical wariants) as used in this specification is equivalent to &he term “includes” and should not be taken as excluding the presence of other elements or features.

Further, wherever used in this specification, the term “imcludes’ is not a term of

Limitation, and is not be taken as excluding the presence of other elements or

Features.

Claims

CLAIL MS:

1. A system for the authentication by a card-issuing financial institution of identifying information of a card-holding user of a public daxta network, including: a secure data entry device connected to the public data network; and a gateway device connected to the public data n-etwork and to a private data network used for transmitting messages between financial institutions; wherein the secure data entry device includes means for the user to enter ident ifying information of a card issued by the financial irsstitution, and means for trans-mitting the identifying information in a secure manmer over the public data netweork to the gateway device; and wherein the gateway device includes means for transmitting the identifying inforemation to the card-issuing financial institution and for receiving an approval response from the card-issuing financial institution over true private data network; whereby the approval response provides authent ication of the identifying inforsmation by the card-issuing financial institution.

2. The system of claim 1 wherein the public data network is the Internet.

3. The system of claim 1 or 2 wherein the secu re data entry device is conmected to the public data network via a personal computer.

4. The system of any one of the preceding claims -wherein the private data network is an inter-bank network used for the transferrall of electronic transaction datea.

5. The system of claim 4 wherein the private data metwork is provided via a dediicated network operated for the sole purpose of cond ucting electronic financial tran sactions.

6. The system of claim 4 wherein the private data n etwork is a virtual private netwvork operated for the purpose of conducting electronic financial transactions via & host public data network.

7. The system of any one of the preceding claims wherein the secure data entry device further includes: a card reader for readirg relevant information stored on the user's card; and a keypad to enable the user ®o enter data into the system.

8. The system of claim 7 wherein the card readeer is able to read one or both of ISO 7816 ‘smart card’ or ISO 7811 ‘mag stripe’ type cards.

9. The system of claim 7 wherein data ente=red by the user includes a Personal Identification Number associated with the card.

10. The system of any one of the preceding cl=aims wherein said identifying information includes one or more of: the Primary Account Number associated with the card; the expiry date of the card; and the user's Personal Identification Number associated with the card.

11. The system of any one of the preceding claims wherein the identifying information is transmitted using a standard transaction message format compliant to 1SO 85683.

12. The system of claim 11 wherein the ISO 85-83 message used is one of an ‘0200 financial presentment message, and or an ‘0104’ authorisation message.

13. The system of any one of the preceding claims wherein the gateway device also includes means for transmitting the approval response to the secure data entry device.

14. The system of claim 13 wherein the secure data entry device further includes means for deriving from the approval response verifiable proof that the customer's identifying information has been authenticated by the card-issuing financial institution.

15. The system of claim 14 wherein said proof is an authentication data block, consisting of data computed in a secure manner from the approval sent from the card-issuing bank.

16. The system of claim 15 wherein the data block is a whole or truncated encryption of the approval message derived using an encryption key stored securely within the secure data entry device.

17. The system of any one of the preceding claims wherein the gateway device further includes means to generate a repla cement card number upon receipt of the approval response from the card-issuingg institution.

18. The system of claim 17 wherein the replacement card number is transmitted to the secure data entry device over the p ublic data network.

19. The system of claim 17 or 18 wherein the replacement card number is generated dynamically for use in a single transaction

20. The system of claim 17 or 18 wherein the replacement card number is maintained and used for multiple transactions.

21. The system of any one of claims 17 to 20 whezrein supplementary details of a transaction are also be transmitted to the gateway device by the secure data entry device, and wherein said supplementary detai Is include one or more of the transaction amount and a merchant identification. 200

22. The system of claim 21 wherein said supplementary details are transmitted to the gateway device in the transaction mess.age carrying the identifying information.

23. The system of any one of claims 17 to 22 wherein the Bank Identification Number of the replacement card number may be selected such that the payment 2% transaction is routed through the gateway device on the private data network before being sent to the card-issuing financial institiation.

24. The system of any one of claims 17 to 22 wherein the Bank Idemiification Number of the replacement card number may be selected such that the payment transactiors is directed over the private data network to the gateway device by identifying the gateway device as a card-issuing institution of the replacement card numb er.

25. The system of any one of claims 17 to 24 wherein the gateway device further incl udes: means for receiving payment transaction messages from the private data network; means for modifying received payment transaction messages; and means for transmitting said modified payment transaction messages to the card-issuing financial institution; whereby the gateway device is able to substitute actual card nuambers for replacement card numbers before transmitting received payment tsansaction messages to the card-issuing financial institution.

26. The system of any one of claims 17 to 25 wherein the gateway device further includes a database of replacement card numbers including corresponding actual card numbers and supplementary transaction details.

27. A method for the authentication by a card-issuing financial institution of identifying information of a card-holding user of a public data networks, including the steps of: providing a secure data entry device connected to the public data network; providing a gateway device connected to the public data network and to a private data network used for transmitting messages between financial institutions; the user entering identifying information of a card issued by the card issuing fimancial institution into the secure data entry device; transmitting the identifying information in a secure manner over the public data network to the gateway device;

transmitting the identifying information to the card-issuing financial institution; and receiving an approval response from the card-issuing financial institution over the private data network; whereby the approval response provides authentication of the identifying information by the card-issuing financial institution.

28. A process for the authentication, by a card-issuing financial institution, of identifying information of a card-holding user of a public data network, the process including the following steps: providing a secure data entry device connected to the public data network; and providing a gateway device connected to the public data network and to a private data network used for transmitting messages between financial institutions; transmitting the identifying information in a secure manner over the public data network to the gateway device; transmitting the identifying information to the card-issuing financial institution; and receiving an approval response from the card-issuing financial institution over the private data network; whereby the approval response provides authentication of the identifying information by the card-issuing financial institution.